Driven by profitable growth and strategic focus on services and international markets, CMC announced total consolidated revenues of Rs1085.30 crore for 2006-07, an increase of 18 per cent compared with Rs916.16 crore earned in the previous year. The company's consolidated profit after tax for the year was Rs69.32 crore registering an increase of 43 per cent compared with Rs48.54 crore in the previous year.
The company announced an increase in dividend to Rs8.00 per share for 2006-07 (Rs5.00 per share for 2005-06).
Operating revenues for the year 2006-07 was Rs1079.81 crore, an increase of 22 per cent over Rs887.19 crore earned in the previous year. The operating profit (EBITDA) increased by 99 per cent to Rs98.97 crore compared with Rs49.79 crore in the previous year. Operating margins increased by 355 basis points over the previous year.
The expansion of margins at the operating level is a validation of the on-going successful transformation of CMC's business profile as it concentrates on margin accretive service lines that are in line with the company's domain and technology competencies. The share of service revenues as part of total operating revenue increased to 63 per cent compared with 58 per cent in the corresponding period last year.
CMC continues to pursue its synergistic strategy with majority shareholder, Tata Consultancy Services. The joint go-to-market strategies that combine CMC's technology skills with TCS' global footprint have helped the share of international revenue as a part of operating revenue increased from 28 per cent to 35 per cent. CMC and TCS have been working in tandem in several areas including embedded systems as well as IT enabled services in markets like the UK and the USA.
"Sustained growth in the American and UK markets helped CMC to achieve impressive growth in international business, where we won new engagements in IT enabled services and embedded systems as well as a significant digitization assignment from a large utility company in UK and a large financial portal in America in synergy with TCS", said R Ramanan, CEO and MD of CMC. "All the four SBUs of the company contributed to the growth of revenue during the year," added Ramanan.
"CMC's profitability continues to improve as we focus on improving and strengthening the financial management of the company and changing the revenue mix to offer more value added services," said J K Gupta, chief financial officer. "While ensuring profitable growth, CMC's management continues to remain focused on strong financial management, which has helped reduce the borrowing levels of the company by 74 per cent from 67.07 crore to 17.76 crore in 2006-07. The debtors level has come down from 103 days sales to 89 days sales during the year," added Gupta.
The standalone revenues of the company for the year ended March 2007 increased by 16 per cent to Rs994.40 crore as compared to Rs857.76 crore in the previous year. Operating profit (EBITDA) of the company on a standalone basis for the year ended March 2007 jumped 107 per cent to Rs91.32 crore compared with Rs44.08 crore earned in the previous year. The net profit on standalone basis is Rs64.10 crore, an increase of 44.11 per cent over Rs44.11 crore earned in the previous year.